The Internet has thrown up some very counter intuitive business models in the last few years. In time, some of these could well be shown to be daft but for the time being they are on the cutting edge of business.
Conventional wisdom would suggest that having no competitors would be an advantage but in a market place as large as the Internet I think you need competition to ensure any sort of customer base.
Imagine a start up with an innovative idea. There is no established sector but there is potential to attract them, probably from other sectors that are related. Or maybe an established company with a niche product that needs to attract new customers to ensure growth or stability.
This is where competition comes in handy. Although you are all after the same customers, you are all marketing and drawing people to the same sector which advertises both you, your sector and potentially your competitors. So, you win some sales, you loose some sales - but you do stand a greater chance of getting them with competitors doing the same.
Different marketing strategies will target different people and conversions are not always obvious or guaranteed. So once the sector is discovered, customers will often look for competitors to secure the best service and/or price.
I would go as far as saying that entering a completely new sector would actually benefit from competition, so why not create some? You could open source your product and actively encourage people to provide a competing service to stimulate the sector.
Competition ultimately fosters innovation. Each company will be looking at their competition, assessing their products and comparing with their own. This basically creates a feedback loop, where we can reflect on what works and what doesn't work and plan what to do next. We get some new ideas from this new perspective, which starts the loop again from our customers perspective.
Our competitors also push us to iterate ideas faster, to forge better relationships and basically be better than them to ensure we get and retain our customers. All good things, if you ask me.
Complacency is too easy to fall into if we have no need to change. Competition forces us to look for value and act. Our competitors should be considered a mirror - what can we learn about ourselves by looking carefully at what they are doing?
After I wrote this thought process down, I found some other people with the similar points: